Make the most of mobile banking

By: Published on: June, 2013

Mobile banking is poised to become a crucial tool to help corporate treasurers make financial decisions and access a range of services. Carlo R.W. De Meijer and Jonathan Bye, Market Engagement at RBS, explain.

It promises greater flexibility, improved efficiency across
operational and financial supply chains and a better use of
cash and working capital. More effective cash flow forecasting
and
supply chain management lead to an improved risk profile
and, potentially, make it easier to find external financing.

The way corporates transact and view banking activity is
being transformed by the explosion in
smart phone and tablet technology. For example, they can
improve productivity and reduce operational costs by using it
to manage payments and workflow in real time and, where
necessary, on the move.

The benefits for corporates include:

1. Real-time decision making:

Pro-active and user configurable alerts could help with
decision making, risk reduction and faster transactions.
Treasurers will be able to make decisions much faster because
they will have up-to-date information and be able to approve
and initiate payments on the go.

The rich functionality of online banking can now be extended
to the mobile space  including the initiation of payments
and creation of new payees, partly thanks to the rise of
tablets. A raft of new mobile services in core treasury
processes will come to market over the next two years. They
will include tools to enhance the treasurys reporting
functions, automating the capture, formatting and distribution
of critical financial data directly to the treasurers
mobile device.

Banks must recognise that online banking, tablet banking and
mobile banking require a common framework. About 40 per cent of
treasurers use more than one channel to access their bank.

Corporates recognise the efficiency improvements and
convenience that can be gained from leveraging multiple
channels to manage all aspects of banking activity.

Different channels need to be integrated to ensure payment
and treasury functions are streamlined across all forms of
mobile and online banking. Corporates want a snapshot of their
cash positions via mobile banking tools to help them manage
their liquidity more efficiently.

Many of the innovations around payments and other mobile
banking services are coming from non-bank players, ranging from
Google to a host of less well known technology firms. They also
include mobile network operators and non-bank financial
institutions. These companies are increasingly looking to
attract traditional banking customers with innovative products
and applications in areas such as treasury and cash management.
Their banks will have to work more closely with these players
to encourage adoption of corporate mobile banking and
integration with existing service lines.

Challenges include the negative perception of channel and
device security, the proliferation of mobile devices and
related lack of standards and interoperability, and
uncertainty over the regulatory environment. One of the
main concerns is security and the lack of confidence in data
protection. Fears over issues such as fraud and identity, data
and device theft are much higher than in consumer mobile
banking. Banks are actively addressing these issues.

A European Commission Green Paper will propose new rules to
dictate what kind of information may be shared digitally, or
what security measures should be taken by corporate mobile
banking providers.

The diversity and number of mobile devices and their
operating systems present another clear challenge. Banks and
their partners need to offer solutions across a wide range of
devices and software platforms. What is missing at the moment
are standards that enable interoperability between them
all.

To succeed in this new world, corporates need banks which
understand their customers complex financial supply
chains. Factors they need to keep in mind include the seniority
level of treasury users involved, users operation in
multiple time zones and travel frequency. This should help
determine scenarios where mobile corporate banking delivers
real business value.

Corporates should also expect mobile banking tailored to
their needs and further services fine tuned to the specific
roles of various users. Banks should study corporate customer
preferences in terms of the mobile devices they use. Many banks
currently offer a high number of mobile services for smart
phones but not for tablets, although this is expected to
change.

Mobile banking is still at an immature stage. It is,
however, going to play a bigger role for corporates and is
expected to become a mainstream channel in the near future.

We will therefore see a swathe of new mobile services in
core treasury processes coming to the market and banks that are
first-movers in this area will have an advantage.

A number of studies show the potential for corporate
mobile banking  especially among treasurers. According to
a recent AIT E survey amongs more than 300 treasury executives
worldwide:

About 25 per cent of US corporates will use mobile banking
by the end of 2013 and 40 per cent by the end of 2015, with an
even greater demand from European corporatesTwo-thirds of
businesses are at least somewhat likely to use mobile
corporate;

Two-thirds of businesses are at least somewhat
likely to use mobile corporate banking solutions to
perform basic transactions such as checking balances or
transferring funds;

More than half the respondents would be interested in more
advanced corporate mobile banking functions including payments
transaction approval and initiation.

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